Putting an Offer on Your Dream Home? Get Creative With Your Bid to Seal the Deal
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Can a slice of pizza help you buy the home of your dreams? For one woman in Portland, Oregon, that’s exactly what happened. Well, it cost her a few pizzas.
If you’re looking for a little slice of heaven, a home to call your own, you may find that search to be more difficult than you expected. In many American cities, the housing market has rebounded from the housing bubble debacle of 2008 — so much that it can be tough to buy a home. Inventory is not keeping up with demand, and so many people are bidding on houses that the prices wind up going well above asking in many markets.
To make their bids stand out, some people are getting quite creative — and if you’re getting ready to buy a house, you might want to take a page out of their unconventional books. Here are some of the most creative ways we’ve seen to sweeten the deal. Some of them worked, while others… not so much.
1. Offer Free Pizza for Life
Recently, a woman in Portland, Oregon added a little extra cheese to her offer. Donna DiNicola was looking for a new home for her 23-year-old son Johnny Barrett. DiNicola and Barrett found a home that they liked, and the asking price was $249,000. Homes in that area have been selling for well above asking; the home next door recently sold for $50,000 over its asking price.
When you’re in a bidding war, you need to make your offer stand out. DiNicola didn’t expect to win the bidding war, but wanted to get her son comfortable with the bidding process. They offered $26,000 over the asking price, then sweetened their bid by offering the owners a two-month, rent-free lease back option.
And, just as a lark, DiNicola added a kicker: free pizza for life from her restaurant in Portland. By accepting their offer, the homeowner would not only get $275,000 for the house, but also one free pizza each month, for life. It worked! DiNicola’s offer was accepted.
2. Make a Video
In the San Francisco Bay area, bidding wars, well over asking, have been the norm for many years.
To try to make their bid stand out one couple went to great lengths by creating a video. Not a video of themselves begging and pleading that their bid be accepted. No, they went beyond that.
Instead, they went to several homeowners in the neighborhood and somehow convinced all of them to sing a song about what a great addition this couple would be to the neighborhood. Crazy, huh? Despite their efforts, they were unable to secure the home; the seller accepted the highest bid.
3. Write a Letter
Writing a letter indicating that you are interested in a home used to be unusual. Now, it’s commonplace. However, the contents of the letter may help you convince the seller that your bid should receive the highest consideration, so it is often considered a good idea to write one.
“Money talks, but a letter gives a human element to an offer,” said Michael Citron, a real estate agent in Florida. “Sellers want to sell to a buyer who they're comfortable with and can relate to.”
We saw that the video of neighbors singing a bidder’s praise didn’t sway a seller, but things worked out better for Cynthia Kelley in Coral Springs, Florida. Kelley fell in love with a big four-bedroom house as soon as she saw its doggy doors and big backyard. She wrote to the owner, explaining that she knew her three golden retrievers would love the space, and included a photo of herself and her dogs.
Kelley also explained that she was a reserve Army nurse who was called to active duty from 2005 to 2007, and was now ready to buy a home. Her letter touched the seller, who told The Denver Post he felt better selling to Kelley than to other bidders.
In another sale, Laura Kaufman, a realtor in San Francisco, represented a seller who accepted $40,000 less than the highest offer because she was so moved by a letter from a buyer who had lost his wife and was raising two daughters.
Many realtors note that sellers rarely accept less based on a letter alone, but if the story strikes a chord, they might work with that buyer to come up with a winning bid.
Regardless of your bid, do something to help your offer stand out. If you own a business, offering a free service is a great way to sweeten the deal. If you’re creative, why not write a song or film a video?
If you are in a highly competitive market, offering something interesting might be the difference between landing your dream house or not. If you are outbid on your dream home, move on. Whatever you do, don’t stalk the new homeowner; you may end up in prison.
Your Turn: Have you done something creative to help your offer stand out? Share your stories in the comments!
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David L. Wright is a retired CFO. He is author of the Amazon bestselling investing book: Investing for the Rest of Us and maintains a personal finance website: DollarBits.com.